Power to Gas Market By Technology, By Capacity, By Application, By Region and By Country: Industry Size, Share, Growth, Trends and Forecast, 2025 – 2032

Report Summary

Power to Gas Market Size Statistics

• The Global Power to Gas Market size was valued in terms of revenue at USD 40 Million in 2024.

• The Power to Gas Market is projected to cross USD 100 Million by 2032.

• As per Vertex report, the Power to Gas Market is anticipated to grow at a CAGR of 12% from 2025 to 2032.

The Power to Gas market is witnessing significant expansion, primarily driven by the increasing integration of renewable energy sources in power generation and advancements in power to gas technology. One of the primary factors fueling this growth is the rising demand for green hydrogen, particularly in regions such as Europe and Asia Pacific. As nations strive to lower carbon emissions and improve energy security, green hydrogen has become a crucial component of their energy strategies. Moreover, hydrogen's potential applications in mobility solutions and its role as a replacement for natural gas offer promising growth opportunities for the power to gas market. Another key factor propelling the power to gas industry is the urgent need for effective energy storage solutions to mitigate the challenges posed by the intermittency of renewable energy.

Power to Gas Market Overview and Ecosystem

Power to Gas technology converts electricity into gaseous fuels that can be stored and utilized across various sectors. By converting excess power from renewable sources such as wind, solar, and others into hydrogen or methane, this technology enhances energy storage capabilities, supports grid stability, and contributes to decarbonization efforts. Power to gas systems are widely deployed in energy storage, industrial applications, mobility, and power generation.

The power to gas process involves two stages including electrolysis and methanation. The first stage, electrolysis, uses electricity to split water molecules into hydrogen and oxygen. Depending on the application, different electrolysis technologies can be employed, including Alkaline Electrolysis, Proton Exchange Membrane (PEM) Electrolysis, and Solid Oxide Electrolysis Cells (SOEC). The second stage, methanation, converts hydrogen into synthetic methane by reacting it with carbon dioxide. This process can be achieved through either catalytic methanation or biological methanation. The resulting synthetic methane can be injected into existing natural gas pipelines or utilized in various industrial and heating applications. The ecosystem of power to gas industry includes renewable energy producers, power to gas technology providers, utilities, industrial users, commercial and transportation sector.

What are the Power to Gas Market Segmentations and Bifurcations?

Power to Gas Market Segments by Technology

• Electrolysis

• Methanation

In 2024, electrolysis segment accounted for over 80% of the total revenue share in the power to gas market. This technology is set for substantial growth, driven by the escalating demand for green hydrogen and the increasing integration of renewable energy sources into power generation systems. Electrolysis is particularly valued for its efficiency in converting surplus renewable energy into hydrogen, which facilitates energy storage and enhances grid stability. As the transition to sustainable energy systems accelerates, electrolysis is expected to remain the dominant technology in the Power to Gas market.

Methanation, which involves the conversion of hydrogen and carbon dioxide into methane, is anticipated to see significant growth during the forecast period. This technology is gaining attention due to its ability to replace natural gas directly, eliminating the need for additional infrastructure. As industries focus on reducing their reliance on fossil fuels, methanation presents an attractive solution, offering a seamless way to integrate renewable energy into existing natural gas systems.

Power to Gas Market Segments by Capacity

• Less than 100 kW
• 100 - 999 kW
• 1000 kW & Above

In 2024, less than 100 kW segment accounted for more than 40% of the power to gas market revenue. This segment is driven by the increasing emphasis on decentralized energy solutions and the integration of renewable energy sources. Small-scale methanation systems, which efficiently convert renewable hydrogen and carbon dioxide into synthetic methane, are particularly well-suited for local energy applications. The rising focus on reducing carbon emissions and enhancing energy security further fuels the adoption of these technologies. Pilot projects and demonstrations are also playing a critical role in validating the effectiveness of smaller methanation units, encouraging investment from commercial and industrial sectors looking for sustainable energy solutions.

The 1000 kW & above segment is expected to experience the fastest CAGR during the forecast period. This growth is driven by the commercialization of large-scale power to gas projects and the rising demand for these solutions in industrial and utility sectors. Large-scale systems are becoming increasingly viable as energy demands grow and as the push for greater sustainability intensifies, leading to increased investment in high-capacity infrastructure.

Power to Gas Market Segments by Application

• Commercial
• Industrial
• Utilities
• Others

The utilities segment dominated the power to gas market in 2024, accounting for over 40% of the total revenue share. This growth is largely driven by the increasing need for decarbonization and the effective integration of renewable energy sources into the power grid. Utilities are focusing on utilizing Power to Gas technologies to produce hydrogen, which not only enhances energy storage but also stabilizes the grid by addressing the challenges posed by the intermittent nature of renewable energy generation. The shift toward reducing greenhouse gas emissions is further accelerating the adoption of cleaner energy solutions, bolstering the growth of the power to gas market within the utilities sector.

The commercial sector is witnessing rising adoption of power to gas technologies, driven by the growing emphasis on sustainability and the need for energy resilience. Businesses are increasingly leveraging power-to-gas systems to convert excess renewable energy into hydrogen or methane, which allows them to reduce carbon emissions and comply with stringent regulatory requirements. Additionally, the demand for localized energy storage solutions is increasing as companies seek to boost energy independence and mitigate the risks linked to energy price fluctuations. The others category encompasses various niche applications of power to gas technologies, such as in transportation and off-grid systems, where hydrogen or synthetic methane can serve as a viable fuel alternative.

What are the Growth Drivers, Trends, and Opportunities in Power to Gas Market?

Advancements in Electrolysis Technology

Significant progress in electrolysis technologies, particularly Proton Exchange Membrane (PEM) and Alkaline Electrolysis, is driving down production costs. These innovations are improving the efficiency and economic feasibility of hydrogen production, which is crucial for scaling up Power to Gas solutions and increasing market adoption.

Integration with Existing Infrastructure

Power to gas technology offers a seamless way to integrate renewable energy sources with the existing energy infrastructure. By converting excess electricity into hydrogen or methane, power to gas facilitates efficient energy storage and supports grid stability, helping to mitigate the challenges posed by intermittent renewable energy generation.

Growth of Green Hydrogen Market

The global push towards sustainability has led to significant investments in the hydrogen economy. Governments, industries, and private entities are increasingly focusing on green hydrogen as a key element in their decarbonization strategies. This rising interest is fueling demand for power to gas technologies, which play a vital role in producing green hydrogen from renewable energy sources.

Hydrogen Blending in Gas Grids

The growing trend of blending hydrogen into natural gas networks is creating new opportunities for Power to Gas solutions. By introducing hydrogen into existing gas infrastructure, power to gas technologies are enabling cleaner energy consumption and reducing the carbon intensity of natural gas, enhancing the attractiveness of hydrogen as a fuel alternative.

Expansion of Hydrogen Refueling Stations

The expanding network of hydrogen refueling stations, driven by the rising adoption of hydrogen-powered vehicles, is further bolstering the demand for Power to Gas technologies. This infrastructure growth is essential to support the transition to a hydrogen-based transportation sector and is opening up additional avenues for power to gas deployment.

Power to Gas Market Report Scope & Snapshot

What are the Regional and Country Trends in Power to Gas Market?

Global Power to Gas Market - Regional Insights and Trends

• North America
• Europe
• Asia Pacific
• South America
• Middle East and Africa

Europe established itself as the leading region in the global power to gas market, accounting for over 45% of the revenue share in 2024. The primary drivers behind Europe’s leadership include the urgent need for decarbonization and the seamless integration of renewable energy sources into the existing energy system. As concerns about carbon emissions continue to rise, European nations are increasingly adopting Power to Gas technologies, which effectively convert excess renewable energy into hydrogen and methane. These technologies not only facilitate energy storage but also improve grid stability. Furthermore, supportive government policies, along with ambitious climate goals, are accelerating investments in this sector. The growing demand for green hydrogen across various industries, combined with advancements in electrolysis and methanation technologies, positions Europe at the forefront of sustainable energy solutions.

North America Power to Gas market is gaining momentum, driven by a growing focus on the integration of renewable energy sources and the development of sustainable energy solutions. Key drivers in this region include significant investments in green hydrogen production and regulatory support aimed at reducing carbon emissions. These efforts are being bolstered by advancements in electrolysis and methanation technologies, which improve the efficiency of converting surplus renewable energy into hydrogen and methane. As the demand for clean energy solutions increases, the North America market is expected to see continued growth, with Power to Gas technologies playing a crucial role in meeting both energy storage and decarbonization objectives.

Asia Pacific region is witnessing significant rise in the adoption of Power to Gas technologies. The rapid expansion of renewable energy sources, particularly solar and wind power, has spurred the need for effective energy storage solutions. Power to Gas technologies are becoming essential for converting excess renewable electricity into hydrogen or methane, enabling better integration of these intermittent energy sources into the grid. As the region seeks to bolster energy security and reduce carbon emissions, the demand for sustainable energy solutions, including Power to Gas, is expected to grow. With numerous countries prioritizing renewable energy integration, Asia-Pacific presents substantial opportunities for market expansion.

How is the Competition Scenario in Power to Gas Market?

Power to Gas Market - Competitive Landscape

The Power to Gas market is characterized by intense competition, with several prominent players actively shaping the industry on a global scale. Key market participants are primarily focusing on advanced technologies such as electrolysis and methanation to efficiently convert surplus renewable energy into hydrogen and synthetic fuels. These technologies are central to meeting the growing demand for green hydrogen and addressing the need for reliable energy storage solutions. The market is being driven by increasing demand for green hydrogen across multiple sectors, including utilities, transportation, and industrial applications. This demand is particularly strong in regions such as Europe and Asia Pacific, where nations are prioritizing carbon emission reductions and enhancing energy security through sustainable energy technologies. As renewable energy integration accelerates, the need for effective Power to Gas systems to stabilize grids and store excess energy becomes more critical.

Some of the key companies operating in Power to Gas market include -

• Cummins
• Electrochaea
• ENTSOG AISBL
• FuelCell Energy
• GRDF
• Green Hydrogen Systems
• GRTgaz
• Ineratec
• ITM Power
• MAN Energy Solutions
• McPhy Energy
• Nel Hydrogen
• Siemens
• ThyssenKrupp

Power to Gas Industry Developments

• In June 2024, Siemens Energy secured a significant 25-year maintenance agreement valued at USD 1.5 billion for two gas-fired power plants in Saudi Arabia. The contract involves providing advanced power plant technologies for the Taiba 2 and Qassim 2 plants, which are set to generate a combined total of nearly 4GW of electricity. These plants, under construction in the western and central regions of Saudi Arabia, will play a crucial role in the country’s energy infrastructure development.

• In May 2024, Nel Hydrogen Electrolyser AS, a subsidiary of Nel ASA, entered into a technology licensing agreement with Reliance Industries Limited (RIL). This partnership grants RIL exclusive rights to utilize Nel's alkaline electrolyzers in India. Moreover, RIL will be authorized to manufacture these electrolyzers globally for its own use, enhancing the availability of advanced hydrogen production technology in the region.

• In March 2024, ITM Power announced its collaboration with Sumitomo Corporation to deliver and install a NEPTUNE electrolyzer at Tokyo Gas Co Ltd's Yokohama Techno Station. This marks a milestone as the first megawatt-class PEM electrolyzer to be manufactured abroad and imported into Japan, supporting the country’s efforts to scale up hydrogen production for energy transition.

• In March 2024, Thyssenkrupp reached an agreement with gas transmission system operators Nowega, OGE, and Thyssengas to connect its Duisburg steel plant in Germany to the GET H2 hydrogen pipeline network by 2028. This initiative is part of Thyssenkrupp's broader strategy to decarbonize its operations, with the GET H2 pipeline project aiming to facilitate the delivery of green hydrogen from production hubs to industrial consumers in the Lower Saxony and North Rhine-Westphalia regions.

• In November 2023, Nature Energy and Andel celebrated the inauguration of a new Power-to-Gas facility in Denmark. The facility, located in Glansager on Als, is part of a joint venture that began in autumn 2022. The biological Power-to-X plant is now fully operational, producing hydrogen that will increase Nature Energy’s green gas output by 12,000 m³ per day, further enhancing Denmark’s renewable energy infrastructure.